The article below appeared in "Nation Review", vol. 3 No. 32, May 25-31, 1973, p. 978.
Justice for BHP
By John Ray (M.A.; Ph.D.)
It would appear to be time that all the hundreds of thousands of ordinary Australians who have put part of their savings into BHP shares - either directly or via insurance policies - started to think of forming a BHP shareholders association to agitate for price justice. These people are in fact getting less than bank interest on their money - all because Leftist agitation has succeeded in preventing BHP from raising its prices to keep up with inflation.
Jaundiced leftwing orators have succeeded in creating a climate of public opinion whereby BHP must seem apologetic if it makes a profit. They have succeeded in blinding people to the fact that even the corner grocer, and in fact most businesses in Australia, make a greater profit than BHP. It is only because of its very large size as a business that the tiny percentage profit BHP makes on its steel adds up to an apparently large sum
Big business has rightly been condemned by many observers of all political persuasions. We appear to be in danger, however, of condemning bigness as such instead of condemning only the abuses to which it can give rise. Bigness also has its advantages. If it had not been for BHP, Ralph Sarich might have had to turn overseas to find a backer for his new orbital engine. What other Australian company could have afforded to commit 50 million dollars to any invention - no matter how promising?
The greatest abuse that big business gives rise to is monopoly pricing. It charges any price it likes and forces the community to pay many times the cost of production to get what it needs. Drug companies appear often to fall into this category. With BHP, however, far from overcharging, they feel endangered even if they ask a fair price. Obviously, the "knockers" of the Australian community will have to find themselves another target.
The recent announcement that there is a shortage of steel in Australia illustrates what always happens when a supplier cannot get a fair price for his products. He stops investing in new plant to make the product. Australia is one of the world's most efficient makers of steel. We produce it so cheaply that we should be exporting huge quantities of it. Instead we import it from Japan. Because BHP cannot get even savings bank interest on money it already has invested in steel production, who could they expect to lend them money to build new steel producing plant? No one. So, instead of our steelmaking capacity expanding with demand, it remains roughly static and BHP is turning to other activities (such as oil exploration) to make money in. For Australia - with all our raw materials and know-how - to have a steel shortage is insane. Public ignorance has brought it about.
Similar things have happened in America in recent times. We read of the widespread shortage of petrol across the US and power blackouts in New York. There it is particularly clear that radical agitation has produced these effects. For years no one would let the oil companies build new refineries. "Build it somewhere else" was the universal shortsighted and selfish cry. The oil companies said in effect: "OK -- have it your way." Now many Americans are suffering from the effects of environmental evangelism.
The New York power shortages are similarly caused. Consolidated Edison tried for years to find a site for building a major new powerhouse, but no matter where they went people got out their placards and said "We don't want that ugly thing here".
The fact that the most modern pollution control devices were to be used didn't seem to matter. Radical environmentalists seem unable to accept that every advantage and facility we seek must have some cost. Now they are paying that cost. No electricity. The only trouble is that they force a lot of others to suffer with them.
Radical agitation is certainly forcing our system to grind to a halt in many instances. They predict that the western economic system will collapse, but in case it doesn't they try to force it to. Why? Because they can't bear that others might find content in a system that doesnt conform to their prescriptions and prejudices.
It is certainly a sad day when people have to take to the streets to get justice. Where radicalism prevails it may be the only way. For the sake of Australia we can only hope that a BHP shareholders association is formed. Mass demonstrations may be the only way to convince people that the producer must get a fair price.
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